My property, building together

Hi,

I own a building plot (value approx. €250,000), which I want to develop with my girlfriend next year. We will both take out the loan together, which will be around €500,000.

We are not married and do not plan to be before building the house.

Of course, there are now many options for how to regulate ownership.

I would just be interested to know how you would handle it in this situation, so that no one ends up a loser now or later in case of a possible breakup.

Best regards

Ask yourself the question, what would it look like if you separated? - Who has the children - Who would stay here or even move away - Who can keep the house or would you sell it

I wouldn’t sign a loan at her place. As far as I know, the bank doesn’t have to release her from the loan if you separate. Without an entry in the land register, she doesn’t own anything of the house. It wouldn’t be a setup for me.

I wouldn't sign a loan in her place.

As far as I know, the bank doesn't have to release her from the loan if you break up. Without an entry in the land register, she doesn't own anything in the house. That wouldn't be a setup for me.

Maybe that wasn't clear from the initial post. She is supposed to be entered in the land register, I have nothing against that. However, 50% 50% would be unfair to me since I am already bringing in the land.

The property is at my place, so in case of a breakup, it would probably be my girlfriend who moves out rather than me.

If my girlfriend is registered as an owner in the land register with any percentage, does that have to do with a gift?

Maybe it wasn’t clear from the initial post. She is supposed to be entered in the land register, I have nothing against that. However, 50% 50% would be unfair to me, as I am already contributing the land. The property is at my home, so in case of a separation, it is more likely that my girlfriend would move out than I would. If my girlfriend is entered as owner in the land register with any percentage, does that have anything to do with a gift?

You have to notarize as a side agreement who is entitled to what and where. Basically, a bank will not be interested in this agreement between you. That means, worst case, your girlfriend will not be released from the loan contract in case of separation because your creditworthiness is considered insufficient. So always difficult.

Hello,

If my girlfriend is registered as the owner in the land register with any percentage, does that have something to do with a gift?

Yup, and that’s exactly your problem. If you now have her registered with 1/3 in the land register (which would roughly make sense if the property is worth 250k and you still want to spend 500k on the house and so on), you are gifting her €83,333, and of course, the corresponding gift tax is due on that. The allowance is only 20k, so she would have to pay tax on about 60k. And the tax rates are pretty steep, at around 30%. So it will cost you nearly 20k. You could really have a nice wedding for that...

Cheers,

Andreas